It's not online yet, but the February edition of WIRED magazine -- a special issue devoted to the underworld -- has a long piece about Mohan Srivastava, a "geological statistician" who used some very simple math that exposed a major flaw in certain types of scratch tickets. The gist of it is that by reading what's on the outside of an unscratched card, he can tell the winners from the losers. Srivastava's findings got at least one scratch game pulled off the shelves in Canada -- but the rest of the industry seems to have been slow in recognizing the wider implications. And since scratch tickets in North American are overseen by just a handful of companies, Srivastava's system means that it would be really easy for a couple of smart people skim the profitable tickets off the top -- while the vast majority of low-income scratchers get shafted. Now here's the scary part: Wired's article points to publicly available stats that suggest someone maybe already be doing exactly that. Writes Wired's Jonah Lehrer:

Consider a series of reports by the Massachusetts state auditor. The reports describe a long list of troubling findings, such as the fact that one person cashed in 1588 winning tickets between 2002 and 2004 for a grand total of $2.84 million. (The report does not provide the name of the lucky winner.) A 1999 audit found that another person cashed in 149 tickets worth $237,000, while the top 10 multiple-prize winner had won 842 times for a total of $1.8 million. Since only six out of every 100,00 tickets yield a prize between $1,000 and $5,000, the auditor dryly observed that these "fortunate" players would have needed to buy "hundreds of thousands to millions of tickets." (The report also noted that the auditor's team found that full and partial ticket books were being abandoned at lottery headquarters in plastic bags.)

According to Massachusetts State Lottery officials, the auditor's reports have led to important reforms, such as requiring everyone who claims a prize over $600 to present government-issued identification. The auditor attributed the high number of payouts going to single individuals to professional cashers. These cashers turn in others' winning tickets -- they are paid a small percentage -- so the real winners can avoid taxes. But if those cashers were getting prepicked winners, that could be hard to uncover. "There've been quite a bit of improvements since we started identifying these issues," says Glenn Briere, a spokesperson for Massachusetts auditor Joe DeNucci. "The problem is that when there's a lot of money involved, unscrupulous people are always going to be looking for new ways to game the system, or worse."

The article also brings up Whitey Bulger's infamous 1991 score, when he was one of three claimants to a $14 million Massachusetts lottery payday (the Feds later ordered the state to stop payment on Bulger's shares, but not before he'd reportedly collected over a quarter of a million dollars). The implication is that, as has long been suspected, the lottery can be an efficient tool for money laundering. Wired is quick to point out that "Srivastava's suspicions [that the mob could be involved in skimming scratch ticket winnings] remain entirely hypothetical; there is no direct evidence that anybody has plundered a game." But according to Wired, as recently as a few months ago, the statistician was able to "double his chances of choosing a winning ticket" by using a fairly simple mathetmatical formula -- which suggests that if he's figured it out, other and less scrupulous players may have, too.